Market Heeds Caution Signs

The stock market has been remarkably resilient despite heaping portions of bad news, particularly about housing. But whether the market will hold up to the blows or buckle, the mindset of the market is undecided.

Tuesday's stock market activity reflected the indecision. Much like Monday, there was some bad news about the housing market as oil prices remained at their year-to-date highs. But unlike Monday, the market couldn't find its way upward, even though much of the day's news was not all that new.

"I think the mindset of the market is pretty good given the circumstances," says John Bollinger, president of Bollinger Capital. "The market passes the acid test for the moment."

But "everyone is frustrated right now," Bollinger added, as the market made a "nice little W-bottom, turned higher and had a big expansion day" last Wednesday. "But we stalled as yet another wave of bad news engulfed the market."

The veteran technician believes that the market will eventually turn back up toward new highs, but when and how he's unwilling to speculate.

The major indices finished the day near their lows Tuesday. The Dow Jones Industrial Average fell 0.6% to close at 12397.29, while the S&P 500 finished down 0.6% to close at 1428.61. The Nasdaq Composite fell 0.7% to close at 2437.43.